Companies would have the freedom to avoid paying overtime wages to high-ranking white-collar workers under a recommendation by a study panel at the Health, Labor and Welfare Ministry.

The so-called white-collar exemption system would also free employers from the obligation to monitor work hours of high-ranking white-collar employees, according to sources.

The system would be applied to employees of major companies who have a key role in their firms' core projects and earn substantial wages, and have considerable authority at work or are close to reaching management positions, according to an outline of the recommendations.

For other employees, the panel said employers should be obliged to give them vacation and pay added overtime wages for excessively long hours.

The recommendations aim on one hand to make an exception to ease regulations on work hours and overtime wages, and on the other to improve the current situation in which many workers are constantly working excessively long hours -- with some dying from overwork.

The Labor Standard Law currently obliges employers to monitor their employees' work hours and pay them extra if they work more than 40 hours a week.

The research panel on future work hour policy, led by Hosei University professor Yasuo Suwa, also recommends measures to prevent excessive overtime work for employees subject to the exemption system.

As part of the measures, employers would be obliged to give the exempted workers special days off and conduct detailed health checks on them, according to the outline.

Agreement from labor unions and the workers subject to the new system would be necessary to implement the measures.

The panel plans to compile a complete report of its recommendations as early as January. The recommendations would be then discussed at the ministry's Labor Policy Council.